1080. Do we need a Prime Minister's Department?
(Sir Christopher Foster) I am not going to be drawn
on that, I do not know. I think, how you actually set it up structurally
is a matter of art over which people have lots of opinions. It
is more important, in my judgement, we should develop something
of the kind than precisely where it is located and who does it;
it does not have to be the Prime Minister, it may be some other
senior minister who has the overall supervisory role.

1081. Can Robin be drawn, or not?
(Sir Robin Mountfield) I think not.

Chairman

1082. But what you would be drawn on, you just
said something about this now, but is it not ironic that we have
set up a Performance Unit in the Cabinet Office but the one thing
that it does not do is any kind of performance measurement?
(Sir Robin Mountfield) No, it was not established
to do that, it was established to explore innovative approaches
to policy. Chris is absolutely right, that you need somebody in
the centre, or some bodies in the centre, which systematically
monitor performance of departments, of agencies, and everybody
else, against a predetermined set of priorities. I would actually
much prefer to see a more systematic approach than we have got
at the moment, here. You are probably familiar with the New Zealand
Strategic Result Areas. I am not a great advocate of much of the
New Zealand model, so-called, but that particular one seems to
me a very sensible, systematic approach to setting out the priorities
of government, in a way that assigns activities to individual
departments that contribute to those strategic priorities. And,
if you can tie realistic targets progressively to that and to
budget, that is fine; all I am saying is, I do not think the PSAs
themselves have taken us quite so far forward as some people think.

Mr White

1083. Would that be regional government and
the local government and all the other sort of Next Steps agencies,
as well as the Whitehall departments?
(Sir Robin Mountfield) I think they all, or at least,
all the central government agencies, should fit into that framework;
how far you can bring local government in, I think, is a broader
question. I think individual local authorities should work in
this way.

1084. And the devolved Assemblies and Parliaments?
(Sir Robin Mountfield) Yes. I think there are modern
priority-setting techniques which are available both to the Scottish
and Welsh administrations and to central government here, and,
indeed, to individual local authorities. I am not sure you could
actually work out one that encompasses everybody.
(Sir Christopher Foster) There is also a problem because
of the large numbers: is it 160 PSAs? The centre is overloaded,
always has been, one way or another. Therefore one has got to
be careful, if one does have a new central apparatus, that one
does not overload it further. One starts by giving it the most
important additional tasks and then perhaps adds to them as it
becomes more experienced in doing what it has been set up to do.

Chairman

1085. But we are assuming, are we not, that
this apparatus is to be in the Cabinet Office?
(Sir Robin Mountfield) Not necessarily.

1086. Where would it be?
(Sir Robin Mountfield) There needs to be sensible
collaboration between the Cabinet Office and the Treasury on these
things. I do not think that it is right for the whole responsibility
for monitoring the progress of departments to be in the Treasury,
because I think that tends to subordinate the substance of policies
to the pound notes, and it puts the wrong emphasis for it to be
wholly in the Treasury; but, clearly, the Treasury has to have
a major part in it. So some sort of collaborative structure between
the Treasury and the Cabinet Office needs to take place, as it
does in New Zealand, for example, where there is, in their case,
a triumvirate which monitors the budget and expenditure, the strategic
priorities and policies and the most senior appointments, and
those three are seen as closely linked, and they are monitored
collectively.

1087. But is not the problem at the moment that
if we had such a collaborative arrangement it would be the Treasury
by another name?
(Sir Robin Mountfield) I am not sure that is necessarily
true. Relations between the Treasury and the Cabinet Office have
always been a bit fluid, and they have changed from time to time,
not least to accommodate the personalities involved.

1088. Michael Heseltine told us it was a bran-tub,
the worst department he had ever served in?
(Sir Robin Mountfield) I noticed that remark.

Mr Turner

1089. Can I just have a couple of really wrapping-up
questions, if I may, firstly to continue this one about the PSAs,
because I think it is quite interesting. I see that one of the
problems that we have is that there is not a sufficiently developed
idea within the public and the media and the politicians about
deciding where blame lies when things have gone wrong, so you
will get the silly situation with the Passport Office fiasco,
the problem there was with the computer, which was blamed on Jack
Straw, who clearly had no idea about the contract that was let,
and was not even party to it. Do you think that we need to look
at a way of separating out somehow the political decisions, which
is to decide we need a new computer for the Passport Office, allocating
the money for it, clearly the ministerial job, and then the actual
implementation of the decision, so that if there is a mistake
anywhere then the proper accountability for that mistake can be
put in place? I say that because I think if we can make that distinction,
then we may get a little bit down the road of avoiding some of
the risk aversion.
(Sir Robin Mountfield) I think this is a very difficult
area, and personally I would be loathe to move down a route which
diminished the significance of ministerial accountability, by
which I do not mean the acceptance of blame by ministers. I think
there is a very important distinction, for which Robin Butler
was quite wrongly taken to task, a distinction between accountability
and answerability. Accountability means the obligation to give
an account of what happened and what is going to be done to make
sure it does not happen again; answerability is the link to the
concept of culpability. Now my view is that the correct relationship,
at least, the classical relationship, is that if something has
gone wrong in the Passport Office, or wherever, that is for the
minister to take managerial action, through his permanent secretary,
to make sure that the correct steps are taken to attribute blame
and to deal with it. That is not a matter that ought to enter
directly the parliamentary chain, and I think if you do enter
the parliamentary chain then what happens is that officials will
begin to assume an authority to act on their own, answerable to
Parliament, which will diminish the effectiveness and authority
of ministers. Now it may be that there are cases where one has
to do that, but I think it needs to be done very carefully and
with proper forethought. There is, of course, a clear exception,
in the case of the accounting officer responsibility to the PAC,
but that is pretty well rooted in practice and convention and
people know what the significance of it is. But I think it is
a very dangerous course, if you give individual officials a degree
of public accountability, by which I mean accountability in the
media and Parliament, that is going to detract from the responsibility
of ministers to Parliament.
(Sir Christopher Foster) May I comment. In my paper
on accountability, which you have, I make very strongly the point
that you should not blame ministers for what they cannot reasonably
be held responsible. It is not fair; being accountable, that is
being required to give an account, is another thing. In the Smith
Report we go into this issue in some detail, saying, well, look,
there are some very genuine problems here. Large IT systems are
an extremely good example. You need a much more systematic processperhaps
it has since been adoptedby which ministers make their
decisions at various stages in the design of these systems, as
predetermined parts of the procurement process. You do everything
on earth to prevent a situation in which you design a system many
years before it is actually going to be completed. Ministers,
I think, do have to understand two points which I think are absolutely
crucial. One is, they must not complicate systems too much. As
I understand it, one of the problems with the Passport Office
system was that, in a sense, those approving passport applications
had to involve themselves in an awful lot of non-quantitative
information, requiring a great deal of discretion in its implementation,
there were too many questions, really, for the system to comprehend.
Now if that were to be the case, I am not saying it was, somehow
you need to simplify system requirements if you can, to make absolutely
sure you are dealing with the utterly and totally essential. The
second point is that ministers must not change their minds on
what they want, on occasions, they have got to accept the second-best.
And to add a third point, having said there are only two, but
the third, I think, is that you do want a system which is as flexible
and adaptable as possible, and that, again, means usually one
which is reasonably simple. I think we have learned a great deal
about how to manage IT projects, but if ministers are constantly
changing their minds, if they want incredibly complicated processes,
they will get dud projects. This holds for not merely IT projects
but buildings and other complex procurement. Compromises are needed,
to get something which works and is sensible.

1090. Is that exacerbated by the fact that ministers
tend to be changed, and therefore the departmental direction will
change with it?
(Sir Christopher Foster) Yes; it must be, it has to
be.
(Sir Robin Mountfield) I was a civil servant for 38
years and I worked for 29 Cabinet Ministers in that time.

1091. Can I take up just one other point, on
a different area. I got the impression, when you were talking
about transferring people from the civil service into agencies
and private sector, and vice versa, that you were really looking
at the fairly senior management levels. Can you just give us some
indication of how far down the line of management, or even administration,
that you would go on these kinds of things?
(Sir Robin Mountfield) The current view, which I think
is right, is that this should extend much more widely than in
the past, and should go down to the old higher executive officer
level, in other words, to relatively junior line management; now,
clearly, not in all cases. But, for example, if you have got a
civil servant managing a local office for the DSS, or something
of that kind, to have experience in a local government operation
of a similar kind would be hugely valuable, and vice versa. And
I think there is every reason to encourage that sort of balanced
movement in much larger numbers than we have done in the past,
and I think there are steps being taken with the Local Government
Association, and so on, to develop that.
(Sir Christopher Foster) I agree with that, absolutely.

1092. Just one other point, to Sir Christopher.
I take it, from what you were saying about the need to have a
large cadre of permanent civil servants, that you would not wish
the Nicholas Ridley line for local government to be applied to
the Civil Service, that you need just one or two meetings a year
to award contracts? You would not wish that to be applied?
(Sir Christopher Foster) Oh, no. I am not making any
judgement on what should be the extent of contracting out; privatisation,
in that context, is a form of outsourcing, which imposes its burdens
on the people in the centre whose job it is to award contracts
and then regulate them. If it matters to ministers, how a public
service is run, in some considerable detail, then probably you
have got to keep it as part of the public service. I have written
on this, too, actually, and it is quite a complicated argument.
You could, theoretically, privatise a great many more parts of
government. However, I think the alternative of having mercenary
armies for example would strike most people as damn silly, if
only because you do not want any army to be in the position where
it could threaten the state; but that is an extreme example. But
the health service is something of which, as a nation, we are
tremendously proud and want to find a way of running it, rather
than it disappear into the private sector. There are other public
services about which we feel much the same.

Chairman

1093. Can I just askI am afraid we have
got to bring our conversation to an end, for a variety of reasonsamongst
all these interesting ideas that we have been sharing, I say to
both of you, if you had to run with one of them, if the objective
is to make government work better, and I know that Sir Robin rightly
tells us that we have been worrying about this for goodness knows
how many years, but on the basis of your own vast experiences,
what is the one thing each that you would really nominate? Is
it something to do with Civil Service pay, is it to do with interchange;
can you just tell us, amongst all the trees, what is the real
runner for each of you?
(Sir Robin Mountfield) I am afraid, rather unhelpfully,
I do not think there is a single one, I think the nature of the
beast is that you have got to tackle it at a number of different
points, I think we have touched on some of them, I think there
may be others. But I really do think that we, like other countries
trying to tackle the modernisation of public services, have got
to approach the thing on a number of different fronts at the same
time. I think myself the joined-up government thing is very important,
but I think the maintenance and the development of a more professional
Civil Service, encompassing all the ideas that that involves,
is another one. And I think myself that the maintenance of a politically
neutral Civil Service is a very important feature, and if we were
to change that, at any time, for any reason, it should not happen
by default, it should happen as the result of a deliberate public
debate about the proper extent to which senior positions should
be politicised.
(Sir Christopher Foster) I would agree with Robin,
of course I would, and I would add other things we have discussed,
like competitive pay scales and issues of that kind, which I think
are, alas, terribly important; but let me play the game and respond
to your question, while knowing that no one reform can be all-important.
If I was asked the single reform which I would regard as most
capable and necessary of development, it is the PSA and the whole
processes that go with it, both in terms of how parliamentary
accountability is exercised in relation to it. My paper certainly
argues just why, at the moment, it is very difficult for Parliament
to exercise accountability well. Many people have said they agree
with me. To do better we need to move from what I would call a
negative, forensic approach to accountability, of blaming people
and catching them out, to a positive, PSA-based, audited one,
where the NAO advises on what has gone well and what has not.
And I would argue the modernisation of accountability line from
Parliament, right the way down into the smallest agency, is the
single thing which, in my judgement, will be of the greatest value
in the better running of this country.

1094. Thank you very much for that. I think
we have had an extraordinarily interesting session. I am sorry
we cannot continue it longer. We shall read what you have written,
as well as, here, what you have said. Thank you very much indeed
for coming along and helping us. Thank you.
(Sir Robin Mountfield) Thank you, Chairman.
(Sir Christopher Foster) Thank you for a very interesting
set of questions; interesting and searching.